Gov. Dannel Malloy revised the state budget proposal he unveiled in February to address a now-larger projected deficit and his latest spending proposal cuts spending drastically compared to the plan he laid out three months ago.
Overall, spending cuts approach $400 million annually, while also shifting some responsibilities to cities and towns and cutting the amount of money those municipalities receive.
Municipalities can expect to see state funding decrease by about $780 million.
Those cuts include $400 million in new responsibilities that they cover the costs of teacher pensions and $289 million in revenue sharing that was part of car tax reform. About $60 million that had come from a pool of money known as the Pequot Fund will be diverted away from cities and towns.
The budget continues to rely on $700 million each year for two years in concessions from organized labor. When asked why the state shouldn't demand more, the governor said he thought the $700 million annual figure is, "fair," and maintained his position that labor unions need to be a part of the budget solution.
Under the revised plan, consumers would see new taxes on non-prescription drugs. They had previously not been subject to state sales taxes, but the governor's proposal removes that exemption with the hope of collecting an estimated $18 million annually.
There is also a proposed 1 percent tax increase on the sales of homes valued at more than $800,000, which is expected to bring in approximately $50 million in new revenue.
The Democrat said his new plan will cover a predicted $2.3 billion deficit in the fiscal year beginning July 1. That's a $600 million increase from an earlier projection. It will be presented Monday.
Democratic and Republican leaders have said they also expect to update their budget proposals.
Legislative leaders and the governor are expected to begin budget talks in the coming days.
Malloy is taking issue with Democrats and Republicans criticizing his other plan to cover the current fiscal year deficit, which is $389 million. He says their comments damage the state's reputation because they show that top leaders don't support taking appropriate steps to balance the state budget.